India’s “Look West” Policy in the Middle East under Modi

India’s interests and capabilities extend well beyond the subcontinent. This essay is part of a series that explores the geopolitical dimensions, economic ties, transnational networks, and other aspects of India's links with the Middle East (West Asia) -- a region that plays a vital role in India’s economy and its future. More ...

In May Narendra Modi’s Bhaaratiya Janata Party (BJP) won the Indian elections and a second term in government. What are the implications of this victory for India’s foreign policy, especially in the Middle East? To address this question, it is useful to review India’s strategy in the region and its principal relationships. In doing so, it becomes clear that Modi has built upon and intensified efforts begun under previous governments. It is also clear that in conducting its policy, the Modi administration has benefited from the current state of international politics in the Middle East.

That Modi has come to be seen as a more active player in the Middle East stands in contrast to expectations following his election in 2014. It was then assumed that he would focus on domestic affairs rather than on foreign policy. It was also assumed that his foreign policy, insofar as he had one, would echo that of previous BJP and the more secular Congress party.[1] It would focus on accommodation with the United States, while also pursuing foreign investment from countries like China, Japan, Singapore and Australia, as part of its “Look East” policy.[2]

India and the Middle East before Modi

India’s Look East policy began after the Cold War ended. The Soviet Union’s demise removed it as India’s key global partner, obliging Delhi to work with the United States, now the dominant power. India’s state-led development model was also exposed to the demands of the market and globalization, now the principal form of economic organization.

India’s need to develop economically made the Middle East increasingly important, both as a source for fuel imports and for Indian labor and remittances. Saudi Arabia, Iran and Qatar have all been vital suppliers of hydrocarbons.[3] Since the oil boom of the mid-1970s, the number of Indians living and working in Arab Gulf states (Saudi Arabia, Kuwait, Qatar, Bahrain, Oman and the UAE) has grown rapidly. The bulk came from southern states like Andhra Pradesh, Tamil Nadu and Kerala and while some found employment in white collar jobs, the majority (70%) work in the low wage, low skilled sectors, like construction.[4]

In response to the growing Indian diaspora, the government established the Ministry of Overseas Indian Affairs in 2004. In the Arab Gulf states alone, the number of Indians was estimated at around 5.7 million in 2012, rising to 8.5 million by 2018.[5] Many of the Indians based there were important contributors to the country’s finances, accounting for a significant share of its global remittances, which climbed from $64 billion to $79 billion in the 2012-18 period.[6]

Over time, Indian political and business leaders realized that countries such as Saudi Arabia and Qatar could supply more than oil and gas, respectively;[7] the wealth they and the UAE had accumulated also made them potential sources of foreign investment.[8] Such interest may well have contributed to the then Manmohan Singh government’s relative silence in relation to the Arab uprisings in 2011 and opposition to any foreign intervention.[9] As a temporary member of the UN Security Council, India abstained on the vote to impose a no-fly zone over Libya, which it saw as targeted against the Gaddafi regime. Indian ambivalence was also apparent regarding Syria. As its uprising descended into war, the Singh government continued its search for balance: it voted for sanctions but also opposed any attempts at regime change.[10]

Modi and the Look West Policy

The broad parameters of India’s Middle East policy were largely in place when Modi was elected in 2014. Rather than take a different path, the new government followed the same course, but intensified what was becoming known as the “Look West” policy, by focusing on three main axes: the Arab Gulf countries, Israel and Iran.

As noted above, India’s relations with the Arab Gulf countries had already undergone change and expansion since the 1970s. By contrast, India’s relations with Israel and Iran are more recent, emerging largely since the 1990s.

In the case of Israel, India’s relationship had historically been cool. During the Cold War, India had stood publicly with the Arab states and the Palestinian nationalist struggle. Domestic considerations were important here. They included Arab states’ support — or at least absence of criticism — for their management of the Muslim-majority Jammu and Kashmir and efforts to placate its sizeable Muslim minority.[11]

Over time, both of these considerations became less relevant. Growing Arab-Israeli dialogue during the 1990s and the Oslo peace process between Israel and the Palestinians diminished that conflict’s centrality in the region and among Indian Muslims. In addition, India had to contend with increasingly critical resolutions against India’s rule of Jammu and Kashmir from the Organization of Islamic Cooperation (OIC), which included a number of Muslim Arab states.

By contrast, Israel demonstrated greater sympathy for India in Kashmir. When the US threatened an arms embargo over the Kargil crisis in 1999, Israel stepped up and became a key supplier for India: between 2000 and 2015 the Israel-India arms trade was worth over $2.2 billion.[12]

Israel also showed appeal beyond the arms trade. As one of the most hi-tech and advanced economies in the Middle East, it potentially offered greater value-added trade and investment. In July 2017 Modi became the first Indian prime minister to travel to Israel. During the visit, Modi and Israeli Prime Minister Nenjamin Netanyahu signed agreements on international development, agriculture and space cooperation.[13] The visit arguably reduced the status and influence of the Palestinians in India’s foreign policy, which was compounded by a growing rapprochement in late 2018 between Arab Gulf Arab states, reflected in the hosting of Israeli leaders by Oman and the UAE.[14]

As with Israel, India’s relations with Iran contain both a national security and an economic dimension. Indian policy makers see relations with Iran not only as a key energy supplier but as a way to contribute to enhancing India’s security in Central and South Asia, by containing India’s main rival, Pakistan, while also offering a counterweight to China’s rising regional presence. For Iran and India alike, the path to constraining Pakistan lies through Afghanistan, which has become a base for militant groups whose threats transcend the country’s borders.[15]

India and Iran first agreed to cooperate on the development of trade and transport links through Central Asia and channel them towards Iran’s Chabahar port on the Indian Ocean in 2003.[16] But it would take another decade before the two sides were able to reach agreement with Afghanistan, in 2016.

The development of Chabahar port and its associated infrastructure is beneficial for India in two main ways. One is that it will make it easier to access oil imports from Iran. Another is that it may balance Chinese trade and development projects in Central Asia and the Middle East which are associated with its Belt and Road Initiative (BRI). More specifically, Chabahar offers an alternative to China’s own efforts to extend influence in the region, including through its own efforts at improving the port of Gwadar, on the Pakistan side of the border.[17]

Possible Constraints Associated with the “Look West” Policy

Despite Modi’s efforts to cultivate ties with the Arab Gulf, Israel and Iran, each presents potential challenges and risks.

First, Israel’s improving status with the Arab world may not endure. Another intifada or revival of support for the Palestinians by the wider Arab public could put pressure on Gulf regimes to reverse their current rapprochement with Israel.[18] If that should happen, India could find its position exposed as well, given its own growing closeness with Israel.

Second, India’s engagement with Iran over Chabahar is unlikely to eliminate the Pakistan/China option. One reason is the more modest scale of India’s efforts in Central Asia and the Middle East, especially when compared to China’s Belt and Road. Some current estimates suggest China has already spent about $68 billion on its China-Pakistan Economic Corridor (CPEC) alone and approximately $200 billion on all other projects to date.[19] Another is that Indian ambitions may become redundant, especially if Iran and Pakistan are able to overcome differences between themselves to cooperate and link their ports as they have claimed.[20] Finally, other powers, such as the United States, could derail Indian efforts. Indeed, the Indo-Iranian agreement over Chabahar has been repeatedly delayed, partly because of US sanctions against Iran. Many of those sanctions aimed at undermine Iran’s nuclear program, which seemed to turn a corner in 2015 when the P5+1 (i.e., the five permanent UN Security Council members plus Germany) signed the Joint Comprehensive Plan of Action (JCPOA).

India welcomed the JCPOA, hoping the deal would pave the way for increased trade and cooperation with Iran. But in May 2018 the US unilaterally withdrew from the JCPOA and re-imposed sanctions. As one of Iran’s biggest oil buyers, India was initially exempted, but its waiver ran out in May 2019. Since then, the Gulf has become more volatile: in an effort to put pressure on other JCPOA signatories, Iran was allegedly behind attacks on several tankers and detained a British-flagged ship and its predominately Indian crew on July 19.[21]

Caught in the middle, India eventually received consular access to its nationals.[22] However, the incident exposed a third challenge for India in the Middle East: the vulnerability of its citizens and economic interests. In recent months it has since deployed two warships and surveillance aircraft to the Gulf to protect its shipping there, while making it clear that it will not join the US-led coalition that is being formed there.[23] The Indian decision may also reflect its own tensions with the US, most notably in the growing trade war between the two.[24]

Fourth, as the US-Iran dispute shows, India is susceptible to regional conflicts over which it has little control. Perhaps the most notable of these is the Saudi-Iranian rivalry and the boycott of Qatar by Saudi Arabia and the UAE. In both cases, the struggle for influence in the region are key; Saudi Arabia and the UAE also distrust Iran and Qatar for their support of Islamist groups.[25] Similarly, Israel suspects Iran of sponsoring Hamas and Hezbollah against it.

When the most recent manifestation of the Qatar crisis occurred in mid-2017, India was under pressure to take sides. Instead it resisted and adopted neutrality as a way of maintaining economic relations with both sides. At the same time, some feared possible retaliation against its citizens, which fortunately never came.[26]

Looking Ahead

The absence of an adverse outcome in the Qatar crisis arguably reflects India’s wider experience in the Middle East under successive Indian governments and Modi’s Look West policy to date. Politically, Delhi has kept its head down, whether over the Arab uprisings or Iran’s nuclear program and the JCPOA, even as it has sought to expand and maximize economic opportunities.

For now, India’s Look West policy seems to be working. But for how much longer is not certain. India’s present approach has been helped by the wider structural context in which the region finds itself in. Whereas India’s footprint in the Middle East was lighter during the Cold War and during the 1990s when the United States was the paramount power in the region, today the situation is more complex. While not absent, US influence is relatively more modest and competes with other, outside powers such as China and Russia, the latter following its intervention in Syria’s civil war.[27]

The Middle East has become more multipolar, with power diffused among a variety of regional and extra-regional actors. Within this mix India has pursued an approach that balances against different parties and their rivalries. But once power ceases to be disparate and starts to become more concentrated, the scope for such action may start to narrow and the present window of opportunity could well close.